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Friday, 20 March 20
VOLATILITY TO INCREASE IN TANKER MARKET FOLLOWING OIL PRICE WAR - DREWRY
Crude oil prices plunged by more than a third in the past week after OPEC+ failed to agree on production cut as demand softened in the aftermath of coronavirus (COVID-19). In its recent report, the IEA estimates global oil demand at 99.9 mbpd in 2020, which is around 90,000 bpd lower than in 2019 and a sharp downgrade from the agency’s forecast in February, which predicted global oil demand will grow 825,000 bpd in 2020.
The market expected OPEC+ to cut supply as the COVID-19 epidemic has spread from China to Europe, the Americas and Middle East. However, the negotiations failed due to strong resistance from Russia, which is of the view that the policy of capping production by OPEC+ producers to support the oil price is facilitating the development of US shale oil, with Russia losing its market share to increasing exports from the US.
After the failure of production cut talks in Vienna, Saudi Arabia started a price war by slashing the official selling prices for crude for key buyers in the international market and hinted at raising crude oil production to full capacity of 12.3 mbpd from April 2020. The ‘shock and awe’ tactics of Saudi Arabia could be a move to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to renegotiate the proposed production cut and then quickly reverse the production surge and thereafter implement the production cut if a deal is reached.
However, the recent move by Saudi Arabia could lead to:
a) Renegotiation on a production cut between OPEC and Russia
b) Prolonged price war between OPEC, Russia and US producers
If there are fresh negotiations to implement a production cut by OPEC+ producers to accommodate the effect of declining oil demand, crude oil prices are expected to normalise.
But if there is a prolonged price war between Saudi Arabia, Russia and US shale oil producers, lower crude oil prices will lead to some improvement in global oil demand and refinery runs. At the same time, onshore stocking activity will also increase, especially in countries such as China as they build their Strategic Petroleum Reserve. A global supply glut is also likely to lead to an increase in floating storage especially among oil producers.
At the same time, sustained weakness in oil prices will eventually hurt US shale oil producers because of their relatively higher cost of production. In such circumstances, the market share of Middle Eastern crude will increase at the expense of US crude.
Meanwhile, tanker rates surged due to a sudden increase in VLCC chartering from Bahri, Saudi Arabia’s national shipping arm. Bahri fixed at least 18 VLCCs since the Kingdom aims to pump more crude into the market as its price war with Russia escalates. The VLCC earnings on Middle East–China (TD3C) route skyrocketed to $166,000pd on 11 March from $30,300pd on 06 March.
If Saudi Arabia manages to strike a deal with Russia to cut production in the short term, tanker rates will plummet to the pre-price war levels because of the ongoing weakness in crude oil trade on account of the spread of COVID-19 globally. On the other hand, if there is a prolonged price war, tonnage demand will rise initially with the increase in oil demand and stocking activity, which in turn will keep freight rates above pre-price war levels.
However, once sustained weakness in oil prices starts hurting US crude production, Middle Eastern crude will start displacing US crude in Asia. This in turn will squeeze tonne-mile demand for tankers as the distance between the US to Asia is almost double the distance between the Middle East to Asia. Thus we estimate that every barrel per day of annual decline in US exports to Asia at the expense of the Middle East will lead to about a 2.5% decline in overall tonne-mile demand for tankers. Freight rates in such a situation will plunge below the pre-price war levels.
Source: Drewry
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Friday, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
Friday, 24 April 20
CHINA COAL PRODUCER YANZHOU COAL POSTS 9.6 PCT RISE IN 2019 NET PROFIT - XINHUA
China’s major coal producer Yanzhou Coal Mining Co., Ltd. said Thursday that its net profit saw a 9.6 percent rise in 2019.
Th ...
Tuesday, 21 April 20
INDONESIA ACCOUNTS FOR 19% OF JAPAN'S TOTAL COAL IMPORTS - BANCHERO COSTA
Coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19.
We have seen China&r ...
Tuesday, 21 April 20
COVID-19: CHARTERPARTY MATTERS FOR SHIPOWNERS - SKULD
KNOWLEDGE TO ELEVATE
Whilst the plight of cruise ships, stranded off shore with sick passengers and crew, may be dominating media headlines, t ...
Monday, 20 April 20
SUPRAMAX: A 52,000DWT SHIP FIXING AN INDONESIA COAL RUN TO CHINA AT $4400 - BALTIC BRIEFING
Capesize
This week was the strongest period seen for the Capesize market in several months. All routes globally succumbed to improved sentiment ...
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- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Planning Commission, India
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
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